India's second-largest service provider by subscribers, Bharti Airtel, has announced a new organizational structure to enhance its focus on the digital business.
The company has formed a new subsidiary, Airtel Ltd, which will now include its telecom business.
Its digital assets, such as Wynk Music, Mitra Payments, Airtel Ads, Airtel IQ, Airtel Cloud and Airtel Secure, are now part of the parent company, Bharti Airtel Ltd, which is a listed firm.
It will also be the holding company for its international business, including Airtel Africa, Robi Axiata and Airtel Lanka, Nxtra and Indus Towers.
"The new structure sets the exciting future course for Bharti Airtel and provides focus on the four distinct businesses – digital, India, international and infrastructure, each in a razor-sharp way," said Sunil Bharti Mittal, chairman of Bharti Airtel in a statement issued by the company.
"We believe this will provide agility, expertise and operational rigor to serve our customers brilliantly while providing flexibility to unlock value for our shareholders. This structure will serve us well over the coming years and is a win-win for all stakeholders."
Parking all the digital firms under the listed firm is likely to make it easier for the company to attract investment. These were earlier housed under Airtel Digital Ltd.
This is also similar to Reliance Jio's strategy. Jio Platforms, which had received funding from several global giants and firms last year, houses the company's digital assets.
Bharti Telemedia, a wholly owned direct-to-home (DTH) subsidy, will continue to exist as a separate entity – but will later merge with Airtel Ltd.
In the existing structure, Bharti Airtel included the telecom business, digital assets, Indus Towers, Airtel Nxtra (data center business) and Bharti Telemedia.
There has been a slew of announcements recently, including the formation of Airtel Ads and Airtel Cloud, which highlight the focus on digital.
India's digital opportunity is growing continuously as the number of users and usage per consumer continue to rise. Almost 50% of the population is yet to be connected, and typically telcos provide the first broadband experience to new Internet users.
Nokia's Mobile Broadband Index 2021 report says that average monthly data usage per user touched 13.5GB, growing by more than 20% annually, in December 2020.
"Mobile emerged as a primary source of entertainment and productivity as an average Indian spent approximately five hours daily on a smartphone which is one of the highest globally," says the report. Operators, including Airtel, hope to capture a bigger piece of this growing digital pie.
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— Gagandeep Kaur, contributing editor, special to Light Reading